CONFIDENTIAL
PRIORITY
(a) The scheme would be based on the compensation that
would have been payable under a traditional compensation scheme.
(b) In order to give HMOCS members an incentive to stay on
after 1997, the money would be paid in annual instalments over
period of years. We think that an 8 year period would be about
right.
(c) In order to help HMOCS members to get over the
psychological barrier of 1997, we propose that 20 per cent of
the total sum should be payable in 1997, after the transfer of
sovereignty.
(d) In order to overcome possible Chinese sensitivities
about serving SAR officials being in receipt of payments from
HMG, we propose that all sums payable under the scheme would be
set aside and would be accessible to the officer concerned only
when he or she retired, resigned or otherwise left the service
of the SARG. The funds might, for example, be placed in an
interest bearing account which would revert to the officer at
the appropriate time.
4. One factor which has emerged clearly in our discussions in Whitehall is the concern of the Treasury to place a firm ceiling
on HMG's financial commitment under the scheme. The cost of the
scheme is of course inevitably difficult to estimate accurately,
since it will depend on such unknown factors as the number of
HMOCS members in service in 1997 and on how long they remain in
service after that date. However, it would be desirable from
the point of view of financial planning to eliminate from the
equation the effect of Hong Kong Civil Service salary increases between now and 1997 (see para
below). Because of the
unpredictability of the cost of the scheme, it would also be
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CONFIDENTIAL